By Jarrett Banks
Xos, Inc., a manufacturer of fully electric Class 5 to Class 8 commercial vehicles, listed on NASDAQ under the new ticker symbol “XOS” on Aug. 20 after completing its merger with NextGen Acquisition Corp. (NASDAQ: NGAC), a publicly-traded special purpose acquisition company or SPAC.
IPO Edge sat down with Dakota Semler co-founder, chairman and CEO to find out more about the company and its go-forward market potential.
IPO Edge: Tell us the company history of Xos. Why build electric trucks? What drew the founders to start the company?
My co-founder, Gio Sordoni, and I founded Xos in 2016 to solve the problems we were facing first-hand as fleet owners and operators. We witnessed the escalating challenges associated with operating a diesel fleet, including the high total cost of ownership, new and ever-changing emissions regulations, and the increasing price of fuel. We realized that converting commercial vehicles from diesel to electric would help solve many of the issues fleet owners faced, so we set out to build a company dedicated to decarbonizing transportation.
Climate change is one of the greatest challenges that our world faces today, and Gio and I recognized early on that commercial trucks are the largest emitters per capita of greenhouse gases in the transportation industry. In fact, commercial vehicles are responsible for approximately 41% of all GHG emitted from transportation (750 million tons annually in the U.S.). As a result, many states and local governments have enacted legislation to mitigate the devastating effects of climate change. Currently, fifteen U.S. states have committed to transitioning to zero-emission vehicles. California, the most populous state in the nation and the location of our company headquarters, has led the way by mandating that 100% of truck sales are zero-emission by 2035. In addition, California has set a target that all trucks on the road are emission-free by 2045. Amid this critical backdrop, it is more apparent than ever that electric trucks must play a significant role in the future of commercial transportation. Xos’ trucks and products present real solutions to meet this evolving need.
IPO Edge: How is Xos’ technology different from other electric truck technology on the market?
Xos’ technology distinguishes itself in several ways: first, the Xos proprietary X-Platform is a modular chassis system designed for any customer, enabling maximum flexibility of application and use cases. The platform can accommodate an extensive variety of medium-duty bodies, wheelbases, and range requirements of up to 200 miles. For example, FedEx Ground operators use the X-Platform with a parcel delivery vehicle body on top, while Loomis uses the same platform with an armored body. This adaptability allows us to reach customers in every industry sector, from cash-in-transit, parcel delivery, food and beverage delivery, and uniform rental and linens servicing.
Our proprietary battery technology is purpose-built for the commercial market. Its cut-to-length modular architecture accommodates various range and payload requirements, a 200,000+ mile usable life, independent cooling, and battery management software performing at the pack-level.
Finally, unlike many other EV companies, we have had our vehicles on the road since 2018, and multiple Fortune 500 companies utilize Xos vehicles in their day-to-day operations. These trucks have proven low total cost of ownership for fleet owners while meeting new emissions regulations. We expect to ramp up our productions significantly to meet ourcurrent backlog of 6,000 vehicles. Our Flex manufacturing strategy leverages strategic partners’ existing facilities and labor to manufacture up to 5,000 vehicles annually per facility when fully ramped up, all while staying within close proximity of our customers.
IPO Edge: Who are your current customers? Do you have plans to target other industries?
Because of our adaptable and customizable X-Platform, Xos is industry agnostic and we are proud to partner with many of the largest fleets in the world, including FedEx Ground ISPs, Loomis, Thompson Cat, Lonestar, Unifirst, and many others. This diverse customer base has broadened our knowledge and adaptability, because no fleet operates the same vehicle, and each requires its own custom specifications. By the end of this year, we expect to deliver 116 vehicles, andover 2,000 vehicles in 2022. Our main focus is lowering total cost of ownership for fleet operators and creating a strong return on investment as our customers and partners start to make the transition to zero-emissions vehicles.
Additionally, with our new electric powertrain division, Powered by Xos™, we will expand our offerings to medium- and heavy-duty fleet operators. We plan to reveal more key customers and contracts in the near future.
IPO Edge: What is the team currently working on right now?
We recently became NASDAQ-listed as Xos, Inc. after completing our merger agreement with NextGen Acquisition Corp., a publicly traded special purpose acquisition company. We are continuing to execute on our strategic growth planssuch as securing key customers and contracts like our recently announced partnerships with FedEx Ground operators and UniFirst, respectively. As always, we continue to advocate for the mission of electrification and a sustainable future.
IPO Edge: With so many electric vehicles coming to the market, both commercial and passenger, what is your point of view on charging infrastructure?
The ubiquitous presence of charging infrastructure is key to the widespread adoption of electric vehicles. In August, we unveiled Xos Hub™, our mobile charging station. Xos Hub is a significant part of our newest business division, Xos Energy Solutions™ (XES), a suite of charging infrastructure and services designed to help businesses adopt electric fleets more easily. XES includes two main service offerings: Xos Hub and Xos Serve™, our infrastructure-as-a-service. Xos Hub functions as a rapidly deployable battery solution, providing fleets with flexible charging options with no fixed infrastructure improvements required, and can charge up to five vehicles at a time. Xos Serve enables customers to deploy sizable electric vehicle fleets without the need to manage the complexity typically involved with those large-scale deployments. With Xos Serve, our team handles all stages of the process, including energy procurement, mobile infrastructure installation, utility coordination, site evaluation, site preparation, energy storage, charger installation, energy management, and flexible purchasing.
IPO Edge: Is there any advice you would like to give to anyone working in the electric transportation market?
Our advice is to use real-world knowledge from people on the front lines to inform your decision-making and strategy in the electric transportation industry. We found success by focusing on real problems that real fleet owners face today: increasing emissions regulations and decreasing total cost of ownership. We were grateful for our fleet experience that gave us an intimate level of knowledge about the challenges within the commercial transportation industry.
IPO Edge: Does the fact you already have trucks on the road provide a significant competitive advantage?
The fact that we have had trucks on the road since 2018 is a testament to the quality of the vehicles and we consider it to be a critical part of our success to date. We’ve been working closely with our early customers to gather insights and build a product that truly serves them best, delivers on total cost of ownership savings, and helps them meet new emissions requirements. We look forward to continuing to fulfill customer orders and help all fleets go electric.
IPO Edge: There are several other companies working on electric trucks. Are you all competing for the same opportunities?
No, our focus at Xos is specifically on Class 5 to Class 8 commercial vehicles. Even so, we don’t consider other electric vehicle manufacturers our competitors, rather, our main competition is diesel. The success of other EV players will help the whole industry move forward. There is a lot of opportunity in this market, and we’re excited about the advancement of EV technology overall to move fleet electrification forward.
Jarrett Banks, Editor-at-Large